How to Fund Your Revocable Trust

Trusts are an essential part of an estate plan because they can protect your assets from estate taxes, probate costs, creditor claims, and beneficiaries who may not manage their inheritance wisely. 

There are two primary types of trusts – revocable and irrevocable.  For a revocable living trust, you maintain legal ownership and control of all assets. With an irrevocable trust, ownership of all property is given to a lifetime beneficiary and a special type usually helps seniors who may need to qualify for government benefits. Both types have one thing in common: once your estate planning attorney assists you in setting one up, you need to fund it. 

What Does It Mean to Fund a Trust?

“Funding” is a general term meaning that you transfer titled assets to the trust. This includes (but is not limited to):

  • Your home and other real estate
  • Stocks
  • Non-Qualified Retirement Accounts
  • Brokerage Accounts
  • Business interests

Some accounts may also name the trust as a contingent beneficiary such as:

  • Life, disability and long-term care insurance policies
  • Qualified Retirement Accounts
  • Bank accounts Payable on Death

Contrary to popular belief, you don’t have to be ultra-wealthy to set up a trust. Anyone from young singles to widowed seniors can use them as an estate preservation tool. At Tucker Legal Services, we have helped clients of all backgrounds develop trusts that protect their savings and property for themselves and generations to come.

How Do You Fund a Trust in Missouri?

How you transfer your various assets will depend on what they are. For example, if you’re transferring real estate, you will need to sign and record the deed with the county clerk. With financial accounts, your bank will request a Certificate of Trust, and the article that names your trust. Untitled assets like jewelry, artwork, and antique furnishings are transferred by executing an assignment of personal property when you sign your trust.

Some assets like mortgages, business interests, and stocks are a little more complicated to transfer into a trust, but an estate planning attorney can guide you on the necessary steps that requires a specific approach.

It should be noted that some assets should not or cannot be owned by a trust. They include:

  • Bank accounts that receive Social Security income deposits: These accounts cannot be re-titled in the name of the trust. You can still transfer these deposited funds to an account owned by the trust or appoint it as a pay-on-death beneficiary of the first account.
  • IRAs: IRAs can only be in your name. You can, however, name your trust as the contingent beneficiary.
  • Motor Vehicles:  It’s much simpler to add a Transfer on Death to the title of a motor vehicle than to put it in the name of the trust.
  • Firearms: Federal law governs who may own a Title II firearm.  Firearms should be placed in its own, separate NFA “Gun” Trust.

Other types of assets also cannot be owned by a trust, so it is important you talk with your attorney and your financial advisor(s) to determine how best to treat your assets so that they can avoid probate while still complying with the law and/or maximizing tax benefits for your estate and/or your beneficiaries.

Once your trust is set up and funded, you can include new assets by taking the title in the name of the trust. If you forget to put something in the trust, your pour-over will, that comes with your trust, catches the assets and pours them back into the trust.  The pour-over will is filed in Probate Court.

Talk to a Missouri Estate Planning Attorney Today

A well-designed estate plan that includes a trust will protect your estate, avoid probate for property titled in the trust’s name, and give you control over how you want your assets to be distributed after you pass. Tucker Legal Services will help you make the decisions and arrangements that give you peace of mind during your lifetime and protect your loved ones after you’re gone. To schedule a consultation with Attorney Sheri Tucker, contact us today!

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Tucker Legal Services LLC

When you choose Tucker Legal Services, LLC, you choose an experienced attorney and law firm that believes an estate plan is a life plan. The firm strives to build lifelong relationships with clients and help them adjust their plans as their needs change. The firm’s goal isn’t just to help you with an estate plan and send you on your way.

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